REPORT TO COUNCIL
SUBJECT
Title
Action on an Amendment to an existing Agreement for General Chemistry Laboratory Services with McCampbell Analytical, Inc.
Report
BACKGROUND
The City of Santa Clara (City) operates and maintains a drinking water distribution system. This system serves about 130,000 residents and all commercial, institutional, and industrial customers within City limits. It consists of seven water storage tanks, three imported water connections, 20 active groundwater wells, and 34 water quality sampling stations. To ensure quality and safety, the City samples and tests its water sources on a weekly basis, as needed in emergency situations. This schedule meets requirements set by the California Code of Regulations (Title 22, Chapter 15), which governs water quality and monitoring. The City publishes its test results each year in the Water Quality Consumer Confidence Report. To continue service, the City must test its distribution system on schedule and without interruption.
On July 7, 2020 (RTC#20-591), the City Council approved an agreement with McCampbell Analytical, Inc. (“McCampbell”), a State-certified laboratory, to provide the general chemistry water quality testing services required to meet State regulations. McCampbell was selected through a formal Statement of Qualifications process based on “best value,” where McCampbell received the highest overall score. The agreement authorized an initial term of five years, beginning on July 1, 2020, and ending on June 30, 2025, with a maximum compensation not to exceed $251,719. After the initial term, the agreement allows the City to exercise up to two additional one-year option periods.
On September 15, 2025, through the authority delegated by the City Council in RTC #20-591, the City Manager approved Amendment No. 1, exercising the first of two option periods, subject to the same terms and unit pricing. Amendment No. 1 extended the term by four months through October 31, 2025, and increased compensation by $15,000 for a revised maximum allowable compensation of $266,719. This short-term extension was needed to ensure services could continue while the City and McCampbell negotiated updated rates for the remaining option periods.
DISCUSSION
In June 2025, McCampbell informed the City that they would no longer be able to provide services at the current rates. As the original agreement would expire on June 30, 2025, and the City Manager’s delegation of authority only authorized extensions where the agreement terms and pricing remained the same, the City partially exercised the first option period to allow time to review the proposed rates and, if accepted, seek City Council approval for a second amendment.
McCampbell requested a rate increase due to rising operational costs and the need to adjust for inflation, thereby ensuring their ability to provide the City with high-quality services. An analysis by the City determined the proposed rates were fair and reasonable, as they had not been changed over the initial five-year term. The updated rates correspond to a 22% average increase overall, or approximately 4.5% annually over a five-year period, and will remain fixed from November 1, 2025, through June 30, 2027.
The City is recommending Amendment No. 2 to update the contracted rates and exercise the remainder of the first option period as well as the second option period, thereby extending the term through June 30, 2027. The City will prepare to release a new solicitation for these services in late 2026 or early 2027, ensuring continued high-quality services at competitive rates.
The City is also recommending, in Amendment No. 2, that the maximum compensation be increased by $150,000, from $266,719 to $416,719, to support the increased costs and extended term.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
Amendment No. 2 of the contract with McCampbell Analytical, Inc. will increase the maximum compensation by $150,000, from $266,719 to $416,719, to provide services through June 2027. The funding for water quality sampling is budgeted in the Water and Sewer Utilities Department’s Operating Budget.
COORDINATION
This report has been coordinated with the Water & Sewer Utilities Department and the Finance Department.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute Amendment No. 2 to the agreement with McCampbell Analytical, Inc. to extend the term from October 31, 2025, through June 30, 2027, and increase compensation by $150,000 for a revised maximum allowable compensation of $416,719, in a final form approved by the City Attorney.
2. Authorize the City Manager to negotiate and execute future amendments as needed to (1) add, modify or delete services and (2) make de minimis changes, all subject to the total maximum compensation, appropriation of funds, and review and approval as to form by the City Attorney.
Staff
Reviewed by: John Ramirez, Director, Water and Sewer Utilities Department
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Agreement with McCampbell Analytical, Inc.
2. RTC # 20-591
3. Amendment No. 1 - McCampbell Analytical
4. Amendment No. 2 - McCampbell Analytical